Compulsory Earthquake Insurance maximum coverage amount to be doubled

According to the statement by the Insurance and Private Pension Regulation and Supervision Agency (SEDDK), in accordance with Article 13 of the Disaster Insurance Law No. 6305, the square meter costs used as the basis for calculating the insurance value have been redetermined based on changing conditions in the insurance and construction sectors and reconstruction costs, within the scope of the Compulsory Earthquake Insurance Tariff and Instruction Communiqué updated annually by the agency.

The agency has updated the tariff rates while also ensuring that premiums and coverage amounts are updated monthly with inflation to protect the interests of policyholders due to changing economic conditions in Compulsory Earthquake Insurance, thereby preventing the loss of value of premiums and coverage throughout the year.

In line with this, the maximum coverage amount has also been updated, increasing from 640 thousand TL to 1 million 272 thousand TL. The square meter cost used as the basis for calculating the insurance value has been increased from 3 thousand 16 TL to 6 thousand TL for reinforced concrete residences, and from 2 thousand 80 TL to 4 thousand TL for other residences.

With the regulation made by the SEDDK in December, a regulation was also introduced for the compulsory traffic insurance premiums to be updated according to the damage cost index starting from the May 2024 period.

35 BILLION LIRA PAID TO POLICYHOLDERS

In Turkey, the number of Compulsory Earthquake Insurance policies reached 11.7 million in 2023 (a 59 percent insurance rate), while approximately 35 billion TL has been paid to policyholders under the compulsory earthquake insurance to date for the February 6 Kahramanmaraş earthquakes.

With the new tariff regulation, the SEDDK will continue to support policyholders even more strongly during difficult times that may be experienced due to earthquakes.

According to the Communiqué on Amending the Compulsory Earthquake Insurance Tariff and Instruction Communiqué published by the SEDDK in the Official Gazette, the minimum premium amounts for Compulsory Earthquake Insurance have been updated so that they cannot be less than 979 TL, 869 TL, 739 TL, 693 TL, 521 TL, 370 TL, and 252 TL, respectively, from the first group to the seventh group according to the risk group. The new amounts will be valid as of January 1, 2024.

Within the scope of the communiqué, the square meter costs used as the basis for calculating the insurance value will be increased each month by the monthly 2003=100 Base Year Domestic Producer Price Index rate announced by the Turkish Statistical Institute for the previous month. In the event that the announced rate is below zero, the rate in question will be taken as zero.